Analysis of Operating Results (Full Year)

Consumer segment revenue decreased by ¥59.1 billion (2.1%) year on year to ¥2,823.9 billion. Mobile revenue increased by ¥8.3 billion (0.6%) year on year. The increase mainly reflected a slowdown of the decline in ARPU due to the mobile service price reduction implemented in spring 2021, as well as an increase in smartphone subscribers mainly led by the Y!mobile brand. The decline in ARPU due to mobile service price reduction was mainly because of the penetration of price plans introduced in spring 2021 under the SoftBank and Y!mobile brands and further switching of subscribers from the SoftBank brand to the Y!mobile brand. Broadband revenue increased by ¥8.3 billion (2.1%) year on year. This increase was mainly due to an increase in subscribers of the SoftBank Hikari fiber-optic service. Electricity revenue decreased by ¥131.5 billion (33.5%) year on year. This decrease was mainly due to a decrease in transactions in the electricity market. Revenues from sales of goods and others increased by ¥55.7 billion (9.6%) year on year to ¥635.4 billion. This increase was mainly due to an increase in unit prices of smartphones, etc. and an increase in the number of units sold.

Operating expenses^*3 were ¥2,328.4 billion, a decrease of ¥92.2 billion (3.8%) year on year. This decrease was mainly due to a decrease in the cost of service of electricity and a decrease in depreciation and amortization, while there was an increase in the cost of goods of smartphones, etc.

As a result, segment income increased by ¥33.1 billion (7.2%) year on year to ¥495.5 billion.

Enterprise segment revenue increased by ¥37.2 billion (5.0%) year on year to ¥787.5 billion. Within Enterprise segment revenue, mobile revenue increased by ¥4.9 billion (1.5%) to ¥324.9 billion, fixed-line revenue decreased by ¥6.7 billion (3.7%) to ¥175.4 billion, and business solution and others revenue increased by ¥39.0 billion (15.7%) to ¥287.1 billion. The increase in mobile revenue was due to increases in mobile device sales and telecommunications revenue. The decrease in fixed-line revenue was mainly due to a decrease in the number of subscribers to telephone services. The increase in business solution and others revenue was from increased revenue mainly from cloud services and security solutions as a result of capturing enterprise customers' demand for digitalization.

Operating expenses were ¥625.9 billion, an increase of ¥10.7 billion (1.7%) year on year. This increase mainly reflected an increase in costs following the abovementioned increase in business solution and others revenue and the absence of a gain on step acquisition in connection with the consolidation of HEALTHCARE TECHNOLOGIES Corp. that had been recorded in the previous fiscal year, while there was a reversal of provisions for litigation that had been recorded in the previous fiscal year.

As a result, segment income increased by ¥26.5 billion (19.6%) year on year to ¥161.5 billion.

Distribution segment revenue increased by ¥56.6 billion (9.6%) year on year to ¥646.6 billion. This increase was mainly due to solid growth in ICT (Information and Communication Technology) related products for enterprise customers and subscription services such as cloud and SaaS, which are also for enterprise customers and have been strategic areas of focus.

Operating expenses were ¥620.4 billion, an increase of ¥54.6 billion (9.7%) year on year. This increase was mainly due to an increase in cost of sales associated with the increase in revenue.

As a result, segment income increased by ¥2.0 billion (8.1%) year on year to ¥26.2 billion.

Media & EC segment revenue increased by ¥52.4 billion (3.4%) year on year to ¥1,614.1 billion. Within Media & EC segment revenue, media revenue increased by ¥13.5 billion (2.0%) to ¥699.9 billion, commerce revenue increased by ¥28.7 billion (3.6%) to ¥819.7 billion, strategy revenue increased by ¥9.1 billion (11.6%) to ¥87.6 billion, and other revenue increased by ¥1.2 billion (20.6%) to ¥6.9 billion. The increase in media revenue mainly reflected an increase in revenue from account advertising. The increase in commerce revenue is mainly due to an increase in revenue of the ASKUL Group and the ZOZO Group. The increase in strategy revenue mainly reflected an increase in revenue in the FinTech field.

Operating expenses were ¥1,416.2 billion, an increase of ¥14.2 billion (1.0%) year on year. This increase mainly reflected an increase in cost of sales at the ASKUL Group and an increase in depreciation and amortization, while there was a decrease in sales promotion expenses and advertising expenses.

As a result, segment income increased by ¥38.2 billion (23.9%) year on year to ¥198.0 billion.

[Note]

1. *4
   In the three months ended June 30, 2023 and the three months ended December 31, 2023, the LY Group revised its management categories and reclassified the categories of certain services of Media and Other. Accordingly, the breakdown of all service categories in the Media & EC segment revenue for the fiscal year ended March 31, 2023 has been restated to reflect these changes.

Financial segment revenue increased by ¥90.5 billion (63.6%) year on year to ¥232.8 billion. This increase was mainly due to the consolidation of PayPay Corporation in October 2022 and an increase in its revenue.

Operating expenses were ¥237.8 billion, an increase of ¥83.1 billion (53.7%) year on year. This increase was mainly due to the effects of the abovementioned consolidation of PayPay Corporation.

As a result, segment income increased by ¥7.4 billion year on year to negative ¥5.0 billion.

[Notes]

1. *
   On October 1, 2023, Z Holdings Corporation, as the surviving company, completed an intra-group reorganization involving mainly itself and two of its core wholly owned subsidiaries, LINE Corporation and Yahoo Japan Corporation, and changed its trade name to LY Corporation.
2. *
   From FY2023, segment name of Yahoo! JAPAN/LINE has been changed to Media & EC. Accordingly, the five reportable segments became Consumer segment, Enterprise segment, Distribution segment, Media & EC segment, and Financial segment. This change only pertains to the segment name, and there are no changes to the segment classification, scope, or measurement methods.